The multi-family market is hot right now making it harder to find good deals. Finding a way to charge above market rents is one strategy that allows us to buy properties at market and still get the returns we are looking for.
There are various strategies for achieving this, but a relatively new one that has come to my attention is renting out properties on a short-term basis via AirBnB. This week Nav Athwal joins me to discuss this strategy and some things you need to think about before implementing it.
[4:43] AirBnB and how most hosts utilize the platform
- Hosts rent out rooms and/or entire personal homes
[7:31] Alternative ways to use the platform
- Buying properties for the exclusive purpose of renting through AirBnB
- Renting out empty properties through AirBnB while you are unable or unwilling to use them for another purpose
[10:15] Where the short term rental strategy can work
- Look for cities where AirBnB is already very active
- Look for cities with favorable regulations toward short term rentals
[11:42] Scalability of this strategy
- Not completely proven
- Services like Pillow offer on demand concierge and property management
[13:46] Regulatory Uncertainty
- Some cities are limiting short term rentals while others are outlawing them completely.
[15:36] Pro AirBnB cities
- MANY international cities
[19:22] Nav’s advice to real estate investors evaluating this strategy:
- Make sure your ROI is higher than it would be for a long term rental
- Factor in cost to manage
- Factor in expected occupancy rate
- Research the cities regulatory environment
- Location- Is this a location that will attract travelers?
Blog Post: THE RISE OF THE PROFESSIONAL AIRBNB INVESTOR
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